Shelton says shifting clients to a payment mindset and staying educated on products are the two things brokers can control right now
Mortgage brokers make it very clear that they’re not selling mortgage rates to their customers. That doesn’t mean their customers aren’t reading the headlines about the recent rate increases.
Mortgage rates have climbed to 11-month highs, and every headline seems to remind consumers of it. For buyers who are already stretching to afford a home, the constant rate noise can feel like a reason to wait, even when waiting may not be in their best interest.
That is the environment brokers are working in right now, with consumers reading headlines about Fed decisions and walking in the door anchored to a number that may have nothing to do with their actual situation.
Samantha Shelton (pictured top), mortgage broker and president of Align Lending, said the brokers who are succeeding in the current market are not the ones waiting for rates to fall but the ones who have changed how they talk to clients and expanded the tools they bring to the conversation.
"A lot of people aren't as focused on the interest rate as they are their payment," Shelton told Mortgage Professional America. "What we're looking at is, ‘What is your ideal payment? What can you afford? What works for you?’ And then we kind of navigate that backwards."
Building around the payment
Shelton said the payment-first approach looks very different from how deals were structured during COVID, when rates were low enough that almost any payment fell within reach. Today, the math requires more creativity and more options.
She said she now presents multiple structures rather than the two or three choices that used to be standard, including temporary buydowns like a 1-0 or 2-1, permanent rate buydowns, and in some cases 100% financing that keeps cash available for post-purchase renovations.
"Maybe it makes more sense to purchase some points and get a lower interest rate so that you can have that relief right away and recoup your cost over the next 24 months," she said. "And it's just navigating what the next one to five years looks like with you being in this house and what is the ultimate long-term goal, but keeping you within what is comfortable for you right now."
Shelton said the bigger shift is getting clients off the rate number entirely.
"I could tell somebody, ‘Hey, your interest rate is 3%, but your payment is $3,000,’" she said. "If they can't afford or don't feel comfortable with that $3,000, it doesn't really matter what the interest rate is. We just shift the focus into reverse engineering what payment you are comfortable with and how we get there."
While homebuyers could be in a position to refinance once rates drop, Shelton said she doesn’t want that future refinance to become a necessity to keep them within budget.
"If you're comfortable with this payment now, then in 12, 24, 36 months, wherever that might be, if rates do come down, we're only making your position stronger," she said. "We're not putting you in a position where you're like, ‘Okay, I hope I can refi and save myself some bucks next year.’ That's not my goal. My goal is to have you feel comfortable and give you more power later to save money."
Expanding broker education
Shelton said the ability to build these creative structures depends on brokers staying current on products and guidelines. She said the advantage of working with a broker over a retail lender is access to a wider range of options.
"Not only do we want to educate our consumers, but making sure as a mortgage broker that I am staying up on current trends, on market data, on new programs that are coming out," she said. "Because I do have such a wide range of options and possibilities, it's equally as important for me to stay educated in the market so that I can help you get where you're trying to go faster and easier."
She said guidelines and programs change frequently enough that a broker who is not actively keeping up can miss tools that would help a client qualify.
"If you aren't fully submerged into being a mortgage broker, you might miss something," she said. "And it may be a tool that could help a future homebuyer."
Shelton, who sits on the board of the Association of Independent Mortgage Experts (AIME) as its regional director of membership, said the broker channel has room to grow from its current position. Brokers currently hold about 30% of loan originations against 70% for retail.
"As a mortgage broker, what are we doing to educate not only our clients, but ourselves to make sure that we are gaining more traction in the broker channel?" she said. "Education is going to be the key piece driving into 2027 because rates are a hyper focus. But we need to shift that mindset, because it doesn't really matter what the rate is if you can't afford the payment."
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